WASHINGTON - Personal spending rose 0.7% in October, more than economists’ estimates, as auto sales increased following the “cash for clunkers” program, the Commerce Department reported today.
The October increase in consumption was the largest since August when consumption was aided by the federal subsidy for new auto purchases. September consumption declined by a revised 0.6% as car sales eased once the program ended on Aug. 24.
Core PCE, which excludes food and energy expenditures, increased 0.2% in October, the largest increase since April. Core PCE rose 1.4% from a year ago. Total PCE increased 0.2% from a year ago.
Personal income increased 0.2% for the month following an upwardly revised 0.2% increase in September.
Economists polled by Thomson Reuters expected income to increase 0.2% and for consumption to increase 0.5%, according to the median estimate. The core PCE deflator was expected to be 0.1%.
Durable goods purchases in October increased 2.0% in contrast with an 8.7% decrease in September. Purchases of non-durable goods increased 0.2% compared to a 0.6% gain in September. Purchases of services were up 0.3% for October.
